“The first generation of the digital revolution brought us the internet of information. The second generation – powered by blockchain technology — is bringing us the internet of value. A new platform to reshape the world of business and transform the old order of human affairs for the better.”Don Tapscott, Author, Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business and the World
In a previous post, I talked about the hype versus the reality of where we are today in AI in healthcare. Blockchain is another technology that’s already getting massive attention in healthcare. In dozens of online surveys, healthcare executives list blockchain technologies as one of their top priorities in the coming years.
Forty percent of health execs see blockchain as top 5 priorities. Furthermore, the global healthcare market spend on blockchain is expected to hit $5.61 billion by 2025, according to a report by BIS Research. The adoption of blockchain technology could save the healthcare industry up to $100-$150 billion per year by 2025 in data breach-related costs, IT costs, operations costs, support function costs, and personnel costs, and through a reduction in frauds and counterfeit products.
But what is blockchain? – I asked a friend of mine who works in the finance industry to give me a “blockchain for dummies” definition. Here’s what he sent me: “Blockchain is a log of activity that is time-stamped, tamper-proof, and shared across a network of computers. Originally dreamed up in 2009 by an unknown person or group—it’s not known for sure which—called Satoshi Nakamoto as a means to move the digital currency bitcoin, its uses have since been broadened to exchange other types of digital assets, such as data, in private, permissioned networks suitable for businesses. Each transaction that goes into the log of activity is enclosed in a block and linked together in chronological order to form a chain, giving it the name blockchain. With “multiple people looking at the same information, the quality of that information should go up, and operational costs for the provider and the payers should go down because there’s less-frequent contact being done between those two stakeholders.”
If you are interested in a more comprehensive understanding of blockchain, the best book I’ve found is “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World” by Don and Alex Tapscott.
For a comprehensive look at blockchain in healthcare, HIMSS has a wonderful guide. You can access it here.
What about blockchain in healthcare? – Blockchain is gaining traction as a tool that could help solve some of the healthcare industry’s age-old problems that have resulted in wasteful spending and higher costs for providers, insurers, and patients. Healthcare executives are betting that blockchain will be the key that unlocks barriers to healthcare data-sharing and ultimately enables an industry-wide shift to value-based care. But is blockchain “ready for prime time” in healthcare? Here’s where Gartner places blockchain in their 2020 Hype Cycle curve for Healthcare Providers:
Gartner shows blockchain technology just exiting “the peak of inflated expectations” and projects that it will take more than ten years to hit “the plateau of productivity.” So, it will take a decade or more to realize the potential benefits of the technology in healthcare.
Where are we now? – Before we move on to expectations, it’s essential to understand the industry’s current state. First of all, the blockchain is no longer just an innovative opportunity to consider or technology to polish and adopt. It is already used in healthcare organizations worldwide. A 2016 challenge from the Office of the National Coordinator for Health Information Technology invited stakeholders to come up with ways to reform the healthcare delivery system with the blockchain and helped jump-start the industry’s interest in the technology.
“This is the year where we are starting to understand which use cases can be solved now and which will take more time.”John Bass, CEO, Hashed Health
Bass said blockchain is best put to use when addressing problems of trust, transparency, and incentive alignment, and the healthcare industry is full of such issues. In October 2019, Frost & Sullivan published an analysis of over 250 vendors building blockchain-based solutions for healthcare vendors. The conclusion? The progressive healthcare organizations should stop asking “What is blockchain in healthcare” and finally figure out how they should invest in this technology and take advantage of it.
What are the current use cases for blockchain in healthcare? – While there are many potential use cases for blockchain in healthcare, most experts believe that blockchain will drive the most value when applied to healthcare processes that suffer from redundancies or require different data sets to be reconciled. Here are some examples:
For Pharma and Drug Development – Blockchain technology can truly revolutionize the pharmaceutical sector as a whole, as well as the drug discovery, development, and distribution process. For example, by enabling complete visibility and transparency throughout the drug supply chain, blockchain will allow tracking of drugs to their point of origin and thus, help to eliminate falsified medication, reducing revenue loss by up to $43 billion annually for pharma companies, according to BIR Research. If implemented well, blockchain technology can be an excellent solution for enhancing data provenance, integrity, functionality, and, of course, security of a pharma supply Blockchain also holds the potential to help companies:
- Manage and Access Drug Trial Data for Research Purposes
- Manage Clinical Trial Bookkeeping
- Find the Right People for a Medical Trial Faster
For Healthcare providers – Let’s face it; managing patient data, staying on top of compliance, and government regulations are no easy walk in the park for health organizations. The whole process can be challenging, tedious, and inefficient, not to mention the hefty costs associated with this. With that said, blockchain can help improve interoperability, security, shareability, compliance, management, and accessibility of patient data in many ways, including:
- Consent Management
- Fill in the Forms for Hospital Intake
- Create Smart Contracts – both B2B and Patient/Hospital
- Perform Credentials Verifications for Physicians
- Secure Data and Transfer it Safely Between Devices and Health Service Providers
For Payers – No one has a more vested interest in people staying healthy than insurance companies. If patients are healthy, they pay their premiums and insurance companies’ profits increase. With that in mind, payers are leveraging the power of blockchain to help them in various ways:
- Payment Processing and Interoperability
- Micropayments to patients to promote health and wellness
- Revenue Cycle Management for faster claims processing and collections
- Improve Medication Adherence
For patients/consumers – There are numerous opportunities for blockchain to completely redefine the relationship between consumers and the healthcare providers in the market. Some examples:
- Medical History Management and Sharing
- Sell Their Medical Data on a Blockchain Marketplace – (a very controversial issue to be sure)
While most experts agree on blockchain’s potential to disrupt the industry, they caution that the technology is just one tool of many that could be used to revolutionize certain parts of U.S. healthcare. It is not a panacea for fixing what ails the healthcare system. The technology is relatively immature and, for now, struggles to handle very large transactions. Building and scaling it is no easy feat, and it costs money. Fearless industry giants are willing to spend resources to test blockchain capabilities, but others are hesitant. Entire professions, including the lawyers who advise healthcare providers and insurers on new technologies, need to catch up before the industry rapidly adopts blockchain. So blockchain may still be a long way away from affecting patients.
So, what steps should your organization take to prepare for blockchain implementation? – The first natural step is to identify the use case. It is a process of identifying, clarifying, and organizing your needs for a blockchain. The use-case answers why do you need a blockchain for your business? For what do you need a blockchain? And what goals are you trying to achieve with blockchain implementation? The best thing is to start small. Start with some pilot blockchain use-cases. Explore them, test them, use them, analyze results, and then implement blockchain on a larger scale.
Once you have identified the use case for your organization, you can move on to developing a proof of concept for your blockchain project. The proof of concept will be used to demonstrate the value of blockchain to your organization and to help secure funding for the project.
The next step will be to select a vendor for your blockchain project. For most organizations it’s best to go for a blockchain as a service provider. In reality, these providers can help you implement blockchain in your business and manage it. It’s a hassle-free approach to the implementation. You have many options to choose from. You can explore Amazon or Amazon Web Services, Microsoft Azure, or Oracle as your service provider. This pay-as-you-go service not only allows you to pay according to your use, but the pre-designed blockchain templates make the deployment faster.
Once you have reached this point, the final steps in the process are:
- Building & Testing Your Blockchain Solution
- Onboarding Your Stakeholders and Integration
- Deployment of Your Solution
Although blockchain is in the very early stages of adoption in healthcare, the potential is enormous, experts on the subject say. “Very rarely does infrastructure technology create the hype that blockchain currently has,” said Emily Vaughn Bailey, director of blockchain product development at Change Healthcare. “The challenges that blockchain addresses in healthcare are very disruptive.” Executives should follow the developments in this industry, begin an internal dialogue on where the technology will benefit your organization, and identify an internal champion who will drive the process.